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Formed by two of the largest currencies in circulation, the EUR (Euro)/USD (United States dollar) currency pair continues to be one of the most actively traded assets in the world. Currently, the Euro ranks second behind the US dollar in regard to global liquidity.

Given that the unit is made up of two of the most important economies in the world, the pair is also considered a 'major'. This term is used to label the most central currency pairs in the world. For traders who are not aware of how currency pairs are structured, the EUR (in this case) would be considered the base currency, which always remains at one unit, with the US dollar representing the counter currency, or quote currency. The value of the counter currency fluctuates daily and communicates to investors/traders how much it will cost (in USD) to purchase a single unit of Euro.

Important organisations that surround the EUR/USD

Whether or not one actively invests in the financial markets, the majority of the world know, or have at least heard of, the Federal Reserve of the United States, or more commonly referred to as 'the Fed'. This is the central bank for that country, chaired by Janet Yellen who took office in February 2014. Its main objective is to direct general economic policy. The board of governors meet several times throughout the year to discuss US monetary policy and announce its target interest rate. Generally, if interest rates remain unchanged, attention will then be drawn to the tone of the FOMC, which is the Federal Open Market Committee. Investors typically look for dovish/hawkish clues in the Fed's dialogue, which, more often than not, will cause volatile price action on the EUR/USD.

While the Fed commands respect, it's not the only institution to affect the EUR/USD. The European Central Bank (ECB) sets and implements monetary policy for the Eurozone. When President Mario Draghi, who has served since November 2011, takes to the stage, the market most certainly listens!

Some economic influences that affect the EUR/USD

Although the US and European central banks are important, there are other major economic releases that can cause the currency pair to fluctuate, and eventually force the central banks to intervene and alter rates:

• Inflation figures. Inflation refers to the rate at which prices for goods and services rises. If inflation continues to climb (check CPI and PCE indexes) this may spur the Fed, or ECB, to hike interest rates. What this does is make things more expensive and therefore generally slows consumer spending. By the same token, deflation will likely see the two noted central banks lower interest rates in an attempt to encourage more spending.
• Employment data. The aftermath of the monthly US non-farm payrolls report generally produces a sizeable reaction on the EUR/USD. Getting caught on the wrong side of this beast will not be a pretty sight! Employment numbers for the Eurozone's major economies such as Germany and France should also be underscored!

The above two are what we'd consider to be major league. Yet, there are others that also deserve consideration, including, growth data (GDP), retail sales, trade balance etc.

EUR/USD correlations

Basic correlations for the pair are as follows:

• EUR/USD is typically inversely correlated with the USD/CHF.
• GBP/USD and the EUR/USD are positively correlated.
• The US dollar index can be used to determine the overall strength of the dollar, and thus can signal potential turns in the EUR/USD market, given the Euro's weight within the index (over 50%).
• EUR/USD and gold have an interesting positive correlation. The main reason for this has been the shared perception of gold and the Euro as alternative investments to US dollars.

Most active hours

Effectively the EUR/USD pair trades 24 hours a day five days a week. Still, it is not always active! Personally, we've found the EUR/USD to gain traction going into the London open. This typically continues throughout London trade, and follows into the US segment. Though, the pair tends to slow down somewhat during the US afternoon.

In closing…

Of course, there is a great deal more that affects the EUR/USD. What we have attempted to do in this article, however, is give you a foundation, a starting block if you will, to continue research.

We'd be surprised if the title did not raise a few eyebrows! Opening points? Well, we can tell you that we're not referring to pivot point levels. This is a common method. Just type 'Pivot points forex' into Google search, and you'll be inundated with information.

The approach we're going to show here, as far as we can see, is not widely used. Just to be clear though, this technique was not developed by us in any way shape or form. We've simply found credibility in these lines and use them to our advantage.

Yearly, monthly and weekly opening points?

Put simply, these are price points extended into the future from the opening candle of each year, month and week, similar to how you'd plot a typical support/resistance level. Irrespective of the timeframe being traded, however, we always look to draw lines from the opening candle on the hourly chart. This helps locate the exact opening value.

The level can then be used on the M1 right up to the monthly timeframe. The chart below shows a good example of a Monthly opening level used in May. Notice that we've attached the line to the OPEN of the candle. The high, low and close are not important here.

Below is another example. This time, nevertheless, we've taken it from the 2010 yearly open. Once again, the line was drawn using the open candle found on the hourly chart.

Why do these levels usually hold?

Technically, we have confidence in these levels due to years of back testing. Attached below are three charts, two of which were used above showing this in action:

Each level, be it a weekly, monthly or yearly opening, held price reasonably well. Just look at May's monthly opening band, for example. For two week's this monthly level provided strong support and resistance.

Apart from seeing these levels bounce price, what do we believe actually causes a reaction to take shape? To our way of seeing things, this is due to unfilled orders. When the year, month and week comes to an end, a great deal of traders with deep pockets look to cover, alter and open new positions. As such, lots of 'order swapping' takes place, and with it, unfilled orders are often left behind. What we mean by an 'unfilled order' is simply an order that was left unfilled, i.e. not triggered, around a certain price point.

Say that you were a 'big fish' in the forex world who wanted to add to your position going into the month's close, as the instrument being traded was showing signs of strength. Now, big fish do not trade like little fish. We retail traders can place orders and generally receive no slippage. However, when you are trading several hundred lots, one cannot just slam dunk that order into the market, as slippage could place you in a very awkward position, far away from your entry point. So, bigger fish usually enter the market incrementally, and by doing so, do not always get their entire position filled. Therefore, big fish have the choice of leaving the order in place unfilled so as price can pick it up when/if the market returns. This, we believe, is what generates a reaction from these levels from an order flow perspective.

How does one use these opening points?

Personally, we will never use an opening level, or any level for that matter, as a stand-alone tool. It always has to have additional confluence. We absolutely love points of confluence, and they do not get much better than a confluent yearly, monthly or weekly open level. Confluence, in trading, essentially means the combination of structures coming together to form a buy/sell zone.

The chart above shows a setup our team would be very interested in. It boasts a great deal of confluence. The yellow sell zone is made up of the following structures:

• A monthly open level at 1.0937 stretched all the way back from April 2016.
• A H4 mid-level resistance at 1.0950.
• A H4 AB=CD 127.2% ext. at 1.0946.
• A H4 61.8% Fib resistance at 1.0940.

The noted structures help form a trading area. Trading using a zone also gives the trade room to breathe, and a place to position a stop-loss order.

To build a profitable career out of forex trading, you will need to create the ultimate home office

Setting up a proper trading station at home is easy and highly effective. It improves focus and optimizes personal efficiency much needed in forex trading. Whether you are a novice or an expert, your home office can easily affect your mindset and productivity during trade hours.

For an efficient and positive work environment at home, make sure you have everything you need in your trading station. Here are our top 10 must-haves for the ultimate home office:

The Right Desk

After picking a secluded area for your workstation, one of the first things you will need is a great office desk. Don't forget that this will be the center of your home office where forex trading will take place. Make sure to choose the right size for the space as well as the perfect design for your workflow.

There are plenty of options to choose from. But before buying the best looking desk, make sure to consider the following points:

How many monitors do you have? Is the entire desk space going to be usable? Can picture yourself being productive with this desk?

Ergonomic Office Chair

Comfort is key when working in your at-home trading space. Finding a high quality and comfortable chair can encourage productivity and can also improve health. With the amount of hours you can spend trading or studying the market, an ergonomic chair can keep you focused and relaxed.

According to Life Hacker, some the best ergonomic office chairs are made by Herman Miller, Steelcase, Ergohuman and IKEA.

Using a bean bag or an exercise ball from time to time can also be an interesting alternative while working.

Computer

A premium computer setup is the best investment for an at-home trading office. Since most of your work is on the computer, your setup should be dependable and FAST! You want to make sure you get a minimum of a dual core processor, good RAM(Random Access Memory) and fast processing hard drive. This means faster execution times, no lagging issues and real-time figures without interruptions.

A laptop with long battery life is also a good investment. If your house loses power or if you may need to work outside of your home office, you can easily continue to work.

*Quick Tip when shopping: Ask for the best selling computers and laptops used for gaming. These will usually have high performance, reputable quality, and up-to-date hardware.

Multiple Monitors

Multiple monitors enable you to optimize your trading strategies. With so much information coming in, having at least two or three monitors will allow you to track and display trading data all at once. This setting helps you analyze charts or stocks while keeping an eye on other indicators. It also lets you place trades or view quotes without the interference of breaking news or chat rooms.

There are plenty of companies devoted to manufacturing monitors and computers for day trading. Visit EZ Trading Computers, Trading Computers or  Falcon Trading Systems to get an idea on how to use monitors in your home office.

Other Important Desk Accessories

To enhance your trading results at home, here are some extra desk accessories you probably haven't thought about!

• Surge Protector – A simple and cost effective device that protects your computer from unexpected voltage spikes.
• Computer Cooling System – Whether this is a built-in or a makeshift cooling device, plan a cooling system to dissipate heat.
• Ergonomic Mouse – This is a kind of mouse made to fit your hand position and improve comfort during use.
• Gel Mouse Pad – All gel mouse pads decrease stress in the wrist especially during long hours of trading.

Powerful Internet Connection

You cannot be a successful forex trader if you don't have powerful internet connection. Along with a top performing computer, high speed cable internet is an essential for faster data exchange as well as quick executions.

Do browsing pages load quickly? When streaming in youtube.com, is there a lag?See if you are satisfied with your existing connection and go from there. If your current provider offers better plans, get it! The extra monthly fees will be a smart investment and a necessary business expense.

You cannot be a successful forex trader if you don't have powerful internet connection.

Back Up System

As a professional, you must always prepare for the unexpected. Here are a few instances when you would need backup system ready in your home office:

• Power goes off in the middle of an execution. Sudden power loss can be stressful and quite risky. You will need a battery backup power loss system like a UPS(uninterruptible power supply) that will keep your electronics running. Set up a backup power loss system in your home office with devices like an APC Back-UPS 650 or a Cyberpower 1350. Although more expensive, these systems usually come with a good surge protector.
• Your "old reliable" computer crashed without warning.The best way to deal with these unavoidable situations is to prepare a backup computer or a laptop with your trading software ready. You must also backup your Metatrader 4 via online storage service or an external hard drive. Lastly, always make it a point to copy and transfer all files from your day trading computer to any storage system to avoid data loss.

Smart Organization Products

Everyone knows the benefits of having an organized desk. Companies like The Container Store and IKEA have developed simple and stylish products that promote uncluttered spaces. From drawer organizers to cable wire control, there are many smart designs available that can improve your workflow.

Forex Trading Journal

Having a trading journal can seem like an optional tool in your office especially when you have a forex broker. But having your own journal can actually help you with your efficiency. It keeps track of how you execute trades and reviews your personal growth as a trader. It can also analyze your overall performance during a certain time.

Take it from babypips.com : "A disciplined trader is a profitable trader and keeping a trading journal is the first step to building your discipline."

Personal Checklist for De-stressing

Trading can be a high-stress career. But one big advantage in having a home office is that you can personalize your space and make room for things that promote relaxation. Try placing memorabilia on your desk or set up a coffee maker in the area if it helps. You can also prepare your favorite playlist.

Create your own personal checklist with relaxing tips to keep a level head while trading!

One of the best ways to become a successful forex trader is through an optimized trading station. Your setup should boost productivity and create a professional environment for best trading results. When you invest in the right tools for your ultimate home office, you start building a profitable and sustainable forex trading career.

To build a profitable career out of forex trading, you will need to create the ultimate home office.

EUR/USD's pull back from 1.1908 extended to 1.1688 last week but recovered since then. With 1.1908 resistance intact, initial bias remains neutral this week for some more consolidations first. In case of another fall, downside should be contained by 38.2% retracement of 1.1119 to 1.1908 at 1.1606 to bring rebound. On the upside, break of 1.1908 will extend recent up trend to 1.2042 long term support turned resistance next.

In the bigger picture, an important bottom was formed at 1.0339 on bullish convergence condition in weekly MACD. Sustained trading above 55 month EMA (now at 1.1768) will pave the way to key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. While rise from 1.0339 is strong, there is no confirmation that it's developing into a long term up trend yet. Hence, we'll be cautious on strong resistance from 1.2516 to limit upside. But for now, medium term outlook will remain bullish as long as 1.1295 support holds, in case of pull back.

In the long term picture, 1.0339 is now seen as an important bottom as the down trend from 1.6039 (2008 high) could have completed. It's still early to decide whether price action form 1.0339 is developing into a corrective or impulsive move. But in either case, further rally would be seen to 38.2% retracement of 1.6039 to 1.0339 at 1.2516

USD/JPY's fall from 114.49 extend lower last week and breached 108.81 support. Initial bias remains on the downside this week. Sustained break of 108.81 will resume whole corrective fall from 118.65 and target 61.8% retracement of 98.97 to 118.65 at 106.48. On the upside, above 109.55 minor resistance will turn intraday bias neutral first. But near term outlook will remain bearish as long as 110.61 support turned resistance holds.

In the bigger picture, the corrective structure of the fall from 118.65 suggests that rise from 98.97 is not completed yet. Break of 118.65 will target a test on 125.85 high. At this point, it's uncertain whether rise from 98.97 is resuming the long term up trend from 75.56, or it's a leg in the consolidation from 125.85. Hence, we'll be cautious on topping as it approaches 125.85. If fall from 118.65 extends lower, downside should be contained by 61.8% retracement of 98.97 to 118.65 at 106.48 and bring rebound.

In the long term picture, the rise from 75.56 long term bottom to 125.85 top is viewed as an impulsive move. Price actions from 125.85 are seen as a corrective move which could still extend. But, up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.

GBP/USD's decline from 1.3267 extended lower last week but lost momentum ahead of 1.2932 support. Initial bias is neutral this week first. Near term outlook stays cautiously bearish as long as 1.3111 resistance holds and deeper fall is expected. As noted before, price actions from 1.1946 are seen as a corrective pattern and could have completed at 1.3267. Break of 1.2932 will affirm this bearish case and target 1.2588 key near term support for confirmation. However, break of 1.3111 resistance will turn bias back to the upside for retesting 1.3267 high instead.

In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern. While further rise cannot be ruled out, larger outlook remains bearish as long as 1.3444 key resistance holds. Down trend from 1.7190 (2014 high) is expected to resume later after the correction completes. And break of 1.2588 will indicate that such down trend is resuming.

In the longer term picture, no change in the view that down trend from 2.1161 (2007 high) is still in progress. On resumption, such decline would extend deeper to 100% projection of 2.1161 to 1.3503 from 1.7190 at 0.9532. However, firm break of 1.3444 should confirm reversal and turn outlook bullish.

USD/CHF's fall from 0.9772 extended lower last week and breached 0.9594 support. But the pair quickly recovered. Initial bias remains neutral this week first. Near term outlook is a bit mixed. On the one hand, USD/CHF drew strong support from 0.9443 and rebounded. On the other hand, it is bounded inside medium term falling channel and limited below 38.2% retracement of 1.0342 to 0.9437 at 0.9783. On the downside, firm break of 0.9594 will dampen our bullish view and turn bias back to the downside for 0.9437. This could also extend the fall from 1.0342 through 0.9437/43 key support level. On the upside, above 0.9772 will revive the bullish case of reversal and turn bias back to the upside.

In the bigger picture, current development argues that USD/CHF has successfully defended 0.9443 key support level. And long term range trading in 0.9443/1.0342 is extending with another rise. At this point, there is no sign of an up trend yet. Hence, while further rise is expected in USD/CHF, we'll start to be cautious on loss of momentum above 61.8% retracement of 1.0342 to 0.9437 at 0.9996. However, firm break of 0.9443 will carry larger bearish implication and would target next key support at 0.9072.

AUD/USD's pull back from 0.8065 short term top extended lower last week. The pair lost some downside momentum after hitting 0.7838. With 0.7948 minor resistance intact, deeper decline could be seen. But we'd expect strong support from 0.7785 cluster support (38.2% retracement of 0.7328 to 0.8065 at 0.7783) to contain downside and bring rebound. On the upside, break of 0.7948 will argue that the pull back is completed. In such case, intraday bias will be turned back to the upside for retesting 0.8065.

In the bigger picture, rise from 0.6826 medium term bottom is still in progress. At this point, there is no confirmation of trend reversal yet and we'll continue to treat such rebound as a corrective pattern. But in any case, break of 55 month EMA (now at 0.8100) will target 38.2% retracement of 1.1079 to 0.6826 at 0.8451. Break of 0.7328 support is needed to confirm completion of the rebound. Otherwise, further rise is now expected.

In the longer term picture, 0.6826 is seen as a long term bottom. Rise from there could either reverse the down trend from 1.1079, or just develop into a corrective pattern. At this point, we're favoring the latter. And, as long as 38.2% retracement of 1.1079 to 0.6826 at 0.8451 holds, we'd anticipate another decline through 0.6826 at a later stage.

USD/CAD's recovery from 1.2412 short term bottom extended to 1.2752 last week. A temporary top should be formed there and initial bias is neutral this week first. At this point, further rise cannot be ruled out yet. But based on current momentum, upside should be limited by 38.2% retracement of 1.3793 to 1.2412 at 1.2940 to bring fall resumption. On the downside, below 1.2552 minor support will argue that the recovery is completed and turn bias back to the downside for retesting 1.2412.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. Such corrective fall is still expected to extend to 50% retracement of 0.9406 to 1.4869 at 1.2048. At this point, we'd look for strong support from there to contain downside and bring rebound. Nonetheless, on the upside, sustained break of 1.2968, 38.2% retracement of 1.3793 to 1.2412 at 1.2940 will be the first sign of completion of the correction and will turn focus back to 1.3793 key resistance.

In the longer term picture, rise from 0.9056 (2007 low) is viewed as a long term up trend. It's taking a breath after hitting 1.4689. But such rise is expected to resume later to test 1.6196 down the road. But firm break of 50% retracement of 0.9406 to 1.4869 at 1.2048 will raise doubt over this view. In that case, the long term trend could have reversed.

GBP/JPY's fall from 147.76 resumed last week and reached as low as 141.24. A temporary low is in place and initial bias is neutral this week first. But near term outlook remains mildly bearish as long as 144.01 support turned resistance holds. Below 141.24 will extend the fall from 147.76 to 138.65 support and below. As GBP/JPY is seen as staying in consolidation pattern from 148.42, we'd expect strong support from 135.58 to contain downside. On the upside, break of 144.01 will indicate completion of the decline from 147.76 and turn bias back to the upside.

In the bigger picture, the sideway pattern from 148.42 is extending with another leg. But we'd expect strong support from 135.58 and 50% retracement of 122.36 to 148.42 at 135.39 to contain downside. Medium term rise from 122.36 is still expected to resume later. And break of 38.2% retracement of 196.85 to 122.36 at 150.43 will carry long term bullish implications. However, firm break of 135.58/39 will dampen the bullish view and turn focus back to 122.36 low.

In the longer term picture, it remains to be confirmed if whole down trend from 195.86 has completed at 122.36 already and there is no confirmation yet. But in any case, firm break of 38.2% retracement of 195.86 to 122.36 at 150.43 would pave the way to 61.8% retracement at 167.78. And with that, the 55 month EMA will be firmly taken out which suggests that price actions from 116.83 is indeed a sideway pattern that could last more than a decade.